Today’s issue in preview:
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Four stocks for the upcoming AI-powered “Edge Computing” boom
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How to turn the AI boom into your personal passive income machine
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John Deere crushes earnings and soars to new highs. The bull market in precision farming rolls on.
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Our hot hand continues: Defense stocks, oil stocks, and Power Grid Upgrade stocks reach new highs.
Four stocks for the upcoming AI-powered “Edge Computing” boom
Credit: Sumedha Lakmal
When and where will the next AI “demand shock” happen?
The answers to those two questions are worth hundreds of billions of dollars… and could add a zero to your net worth over the next two years.
On February 13, we detailed how AI “demand shocks” are driving some of the largest, fastest stock market gains in history.
AI is the fastest-evolving technology we’ve ever seen… and large tech firms such as Google, Microsoft, and Amazon are spending such huge, unprecedented amounts of money on it (over $600 billion in 2026 alone) that AI-driven demand shocks are hitting manufacturing and natural resource industries like meteors from space.
These “demand shocks” are generating returns of 300%… 500%… and 1,000% in industries such as AI memory, data center components, and AI semiconductors.
With this in mind, an investor should ask: “Where will the next AI demand shock take place? Where will AI take almost everyone by surprise as it did in semiconductors, memory, optics, and cooling?”
I believe it’s going to be in “Edge Computing.”
Now that “Big Tech” has built useful “general purpose” AI programs and infrastructure, the next big thing is getting fully operational, incredibly useful, and incredibly addictive AI installed on “the edge”… where our local devices can run it without having to communicate with centralized facilities.
For individuals, it means the computers in your smartphone, your house, your car, and your medical devices. For businesses and governments, it means factory robots, fighter jets, spacecraft, satellites, warehouse robots, and local servers.
This is where AI will achieve mass adoption.
This big shift to “the edge” will likely create another round of giant stock market winners over the next 2-3 years. In addition to the companies we highlighted on February 13, companies poised to benefit include:
Honeywell (HON): HON is a multinational “everything” player in industrial AI infrastructure. They build rugged devices while incorporating high-level cybersecurity. Factory connectivity is another HON strength, too. HON doesn’t disclose specific Edge AI revenue, but it’s estimated to be ~35% of their total revenue.
Vertiv (VRT): VRT is a provider of critical digital infrastructure technologies like power management, thermal solutions, IT systems, communication networks, and industrial facilities. Edge Computing should not match the massive power demands of hyperscaler data centers, but the need for reliable thermal management will be just as strong. This is exactly where VRT excels.
Nvidia (NVDA): It’s impossible to talk AI infrastructure without NVDA. Most of the NVDA narrative focuses on data center hype, but its Jetson platform is critical to the Edge AI push. As Edge AI hardware markets are forecasted to grow at an 18% compound annual growth rate through 2035 (as per researchnester), it’s difficult to argue against NVDA winning a huge portion of this future market.
One Stop Systems (OSS): While the three stocks above offer relatively safe exposure to the Edge theme, our favorite speculative stock is One Stop Systems. OSS builds ruggedized, high-performance computing platforms that can survive the heat, shock, and vibration of the Edge. Importantly, it specializes in the defense sector with contracts for tanks, fighter jets, and submarines. This makes it a pure-play Edge company poised to benefit from booming defense spending.
Get ready to hear about Edge Computing a lot more. More importantly, get ready to invest in well-positioned companies before the next demand shock… and before the crowd arrives.
How to turn the AI boom into your personal passive income machine
Credit: Denis Shevchuk
It looks like the market is waking up to our big “income from AI” idea.
America’s largest pipeline operators have soared over the past month.
In early 2024, I saw the natural gas pipeline business as the best way to generate substantial passive income from the AI boom.
Given AI’s enormous promise, the world’s largest and wealthiest companies are embarking on the biggest capex spending cycle in history. Giants such as Google, Meta, Microsoft, and OpenAI are spending hundreds of billions of dollars a year on data centers, AI chips, and other infrastructure components.
All that AI infrastructure is poised to consume vast amounts of electricity. S&P Global estimates that global electricity demand will increase by nearly 50% by 2040.
I’ve frequently mentioned how AI’s growing power demands are a bullish driver for natural gas. Natural gas is the preferred clean-burning fuel for power plants that support AI data centers. This is why I believe natural gas producers such as EQT (EQT), Antero (AR), Expand Energy (EXE), and Range Resources (RRC) are compelling long-term stock ideas.
However, all the natural gas in the world isn’t worth much if you can’t transport it to customers.
This is where America’s vast natural gas transportation, processing, and storage industry comes in. An extensive network of pipes crisscrosses America to allow energy companies to transport natural gas from the wellhead to the power plant. If we get an AI-driven boom in natural gas consumption, we get a boom in natural gas transportation by default.
Over the past month, the market has enthusiastically supported this thesis. Blue chip pipeline operator Enterprise Products (EPD) is up 12.5% to reach a new all-time high. Fellow blue chip Kinder Morgan (KMI) is up 19% to reach an all-time high. Fellow blue chip operator Energy Transfer (ET) is up 10% to reach an all-time high.
A gain of 12% in one month isn’t extraordinary for an AI semiconductor maker or a space industry firm in hypergrowth mode. However, it is extraordinary for a relatively stodgy pipeline business. A move like this only happens thanks to a huge influx of money from institutional investors recognizing the situation described above.
The typical pipeline operator is not your conventional “high-risk, high reward,” AI play. Instead, it’s a boring and predictable business that generates regular cash flows and shareholder distributions. And it’s getting an AI boost that will last for years. This sector’s extraordinary performance over the past month is confirmation that I’m onto something.
John Deere crushes earnings and soars to new highs. The bull market in precision farming rolls on.
Credit: Nils Versemann
It really is a bull market in precision farming. And AI really is going to the farm.
For confirmation of these statements, we need only look at yesterday’s big earnings beat from John Deere’s (DE) and today’s soaring share price.
On February 3, I wrote a bullish note on farm tractor and equipment giant John Deere (DE). The company’s unique shade of green is a common sight in fields and farms across the country.
John Deere isn’t your typical 189-year-old stodgy manufacturing company, however. It’s an AI company dressed as a tractor company.
Deere is often cited as one of the best ways to play the boom in big data analytics and AI because it has invested heavily in building its “precision farming” expertise and product suite. This includes data analytics and machine sensory technology that allow farmers to precisely place seeds, apply fertilizer, and spray crops with pesticides… all of which help reduce farming costs and improve crop yields. Deere is also rolling out autonomous operating features, which essentially turn tractors into farm robots.
Deere’s investment in technology and its massive manufacturing capacity give it a significant competitive advantage over its competitors. They also helped the company report outstanding revenue and earnings growth yesterday. This news is driving a huge spike in Deere’s stock price. Shares are up 9% on the day as I write and have reached an all-time high. It’s a bull market in precision farming.
Market Notes
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Our September 29th recommendation to own oil stocks is paying off like a broken slot machine. Oil giants Chevron (CVX), BP (BP), Cenovus (CVE), Eni (E), Shell (SHEL), Equinor (EQNR), Diamondback Energy (FANG), Devon Energy (DVN), Suncor (SU), Canadian Natural Resources (CNQ), and ConocoPhillips (COP) all hit new yearly highs today. The S&P Oil & Gas Equipment & Services ETF (XES) reached an all-time high today.
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Our January 28 recommendation to own AI appliers is off to a strong start. AI-centric insurance firm Lemonade (LMND) is up 11% after reporting strong Q4 earnings.
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Our October 7, 2025, recommendation to invest in the Power Grid Upgrade theme continues to pay off. Big electrical contractor Quanta Services (PWR) just hit a new yearly high. It’s up 84% over the last year.
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Our recommendation to get long the defense spending boom theme continues to pay off. Defense giants Lockheed Martin (LMT) and Northrop Grumman (NOC) reached new all-time highs today.
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The AI Lawnmower continues to mow down stocks in the KIDS category. Consulting giants Accenture (ACN) and Wipro (WIT) reached new one-year lows today. Online travel giant Booking Holdings (BKNG) reached a new one-year low today. Entertainment production software firm Computer-Generated Imagery (GIB) reached a new one-year low today.
Regards,
Brian Hunt
Editor, Money & Megatrends
